BoE votes unanimously to keep policy unchanged

The Bank of England on Thursday voted unanimously to stand pat on policy measures, saying little has changed since November's inflation report.

The Monetary Policy Committee decided to leave interest rates at 0.25% and asset purchases at £435bn, in a move widely expected by analysts.

In the minutes of the policy meeting, the Bank pointed to November's inflation report in its decision to keep measures unchanged.

"A slowdown in growth remained likely, but there had been little news since the time of the November inflation report about domestic activity and, although the near-term global outlook had improved, this was counterbalanced by more elevated risks.”

However, the Bank said inflation may overshoot its 2% target by less than it forecast in November in light of the recent appreciation in Sterling. The pound has strengthened 6% on a trade-weighted basis since last month's inflation report.

The BoE reiterated that it was ready to tighten or loosen policy if needed to respond to any changes in the economic outlook as Brexit deliberations continue.

"The December MPC minutes do little to change the view that interest rates are likely to stay at 0.25% through 2017," said Howard Archer, chief UK and European economist at IHS Global Insight.

"Indeed, it currently looks more likely than not to us that the Bank of England will be keeping monetary policy unchanged for a prolonged period (maybe out to 2020). We believe the Bank of England will be pretty tolerant on the probable appreciable inflation overshoot given the prolonged, highly uncertain outlook that the UK economy is likely to face as the government negotiates the exit from the EU."